Pentagon Spending on Prescription Drugs Soars

Defense Department spending on prescription drugs in the past decade has soared, reflecting the aging military retirees its health care program covers, according to a newspaper analysis.

An analysis of Pentagon drug purchases since 2002 published Sunday by the Austin American-Statesman found, for example, that last year the Defense Department spent more on pills, injections and vaccines than it did on Black Hawk helicopters, Abrams tanks, Hercules C-130 cargo planes and Patriot missiles combined.

And the rapid rise is attributed less to wounded soldiers returning from wars in Iraq and Afghanistan than to retirees buying prescriptions for ailments such as arthritis, osteoporosis and diabetes. There are 15 active military bases in Texas and about 1.7 million veterans, the second highest veteran concentration in the country, according to the Texas Veterans Commission.

Officials with the military's health care program Tricare say Pentagon spending on drugs increased by more than 123 percent since 2002 to $6.8 billion in 2011. That was nearly double the growth rate of overall pharmaceutical sales in the United States during the same period.

Prescriptions for active-duty troops account for only about 10 percent of those filled under Tricare. Instead, experts say, it's military retirees who are driving the increase. Additionally, there's more use of retail pharmacies where drugs cost significantly more than on military bases.

"If we don't address it soon, it may harm our national security in the long run," the centrist think tank Third Way wrote in a February report about ballooning defense health budgets. "It will also impact operational effectiveness and threaten health care benefits for active duty troops and their families."

"It's a national security concern," said Mieke Eoyang, director of the national security program for Third Way. "It's something we have to come to grips with as a nation."

There is concern the rapidly growing drug costs could divert money from training and weapons.

The military is not immune to the skyrocketing health care costs that plague average Americans. The overall military health budget has nearly doubled since 2002.

Jim Wilson, a University of Texas College of Pharmacy professor and former head of the Army's pharmacy programs, said expensive specialty drugs in particular will drive military drug spending.

"They will just eat your budget alive," he said.

The newspaper analyzed nearly 500,000 drug purchases through two agencies within the Defense Department that handle those purchases - the Defense Logistics Agency, which buys from wholesalers, and Tricare Management Activity, which handles prescriptions bought through the mail and at retail pharmacies. The analysis did not include the mail-order drugs accounting for about 15 percent of total military prescription drug spending.

The analysis found, for example, that the Defense Department has spent more than $5 billion since 2002 on well-known drugs Lipitor, Plavix, Advair, Nexium and Singulair, as well as $380 million on erectile dysfunction drugs.

The military also spent at least $2.7 billion on antidepressants and more than $1.6 billion on opioid painkillers such as Oxycontin and hydrocodone during the same period.

The growth has been a boon for pharmaceutical companies as well. Pfizer Inc. led the way with more than $8 billion in sales through the Department of Defense since 2002.

In 2001, the new Tricare for Life benefit for military retirees older than 65 with at least 20 years of service expanded the number of beneficiaries and allowed them to fill prescriptions at retail pharmacies.

The Pentagon has tried to control drug spending in recent years by overhauling its formulary system and requiring higher copays for expensive drugs. In 2010, it launched a marketing campaign to persuade troops and retirees to use mail-order pharmacies rather than retail stores.

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